How US Credit Scores Work

In the US, almost every lender, landlord and many phone carriers decide on you by checking your credit report and a credit score computed from it. Credit history does not follow you across borders. A perfect record in London, Hong Kong or Shanghai counts for nothing at a US bureau, so every newcomer, and every non-resident, starts with no file at all.

This guide explains how the system works, so the rest of this section (Amex Global Transfer, first card, keeping cards alive from abroad) makes sense.

#The three credit bureaus

Three private companies keep the credit files. They are called consumer reporting agencies or "bureaus":

Card issuers report your account (limit, balance, payment status) to one, two or all three bureaus, usually once a month around your statement date. That means your three reports and scores can differ slightly.

#FICO vs VantageScore

A score is a number calculated from your report. The two main models are:

• FICO (by Fair Isaac). Most lenders use it. There are many versions (FICO 8, FICO 9, FICO 10, and industry versions such as Bankcard or Auto scores).
• VantageScore (made jointly by the three bureaus). Many free apps show it.

Both usually run from 300 to 850. Rough bands:

#The five FICO factors

FICO publishes the general weights for the population as a whole:

#Utilization, the lever you control

Utilization = reported balances ÷ total credit limits. It is calculated per card and overall.

• Under 30% is fine. Under 10% is ideal. Reporting $0 on every card can score a few points lower than a small balance on one card.
• Utilization is based on the statement balance the issuer reports, not on whether you pay in full. To show low utilization, pay part of the balance before the statement closes.
• It has no memory in most FICO versions. Once the balance drops, the score recovers next month.

#Hard pulls vs soft pulls

Many issuers limit how many new accounts you may open. Chase's widely reported "5/24" rule is one example: you are usually declined if you opened 5 or more personal cards in 24 months. Space out applications, especially in your first year.

#Why non-residents start from zero

• US bureaus only collect data from US lenders. Foreign bank data is not imported.
• Your file is keyed mainly by name + date of birth + SSN/ITIN + address. Without a US identifier and address, there is nothing to attach history to.
• Some cross-border programs let a lender look at your home-country record, for example Amex Global Transfer. They still open a new US file that starts at age zero.

#How ITIN files work

An ITIN (Individual Taxpayer Identification Number, Form W-7) is issued by the IRS to people who need a US tax ID but cannot get an SSN. See SSN vs ITIN.

• Bureaus can build a file on an ITIN just as they do on an SSN. Issuers that accept an ITIN report your account under it.
• If you later receive an SSN, ask each issuer to update your record to the SSN. Then check all three reports to confirm the history merged into one file. If it did not, contact the bureaus with proof of both numbers.
• Some accounts can be opened with only a passport (for example certain Amex and fintech cards). Those issuers still report to bureaus, and matching relies on name, date of birth and address. Keep these identical across every application.

#Credit freezes

A security freeze blocks new lenders from pulling your report, which stops most new-account fraud. It is free by law at all three bureaus.

1. Create an account at each bureau (Experian, Equifax, TransUnion) and freeze all three.
2. Before applying for a card, temporarily lift the freeze at the bureau(s) the issuer uses (or all three).
3. Re-freeze afterwards.

A freeze does not affect your score or your existing cards. Consider freezing once you have a file, especially if your identity documents were ever exposed.

#Checking your score and report for free

Checking your own score is a soft inquiry and never hurts it.

#Common pitfalls for newcomers

• Applying for many cards at once. Several hard pulls on a thin file get you declined and slow your progress.
• Letting a statement close with a high balance. Utilization looks like risk even if you pay in full.
• Missing a payment while travelling. Turn on autopay for at least the minimum on every card.
• Closing your first card. It anchors your credit age. Downgrade to a no-annual-fee version instead of closing.
• Inconsistent personal data. Different spellings of your name, or different addresses, can split your file.

#FAQ

Does my home-country credit score transfer? No. Only specific programs (such as Amex Global Transfer) let a lender consider it, and your US file still starts new.

How fast can I reach 700? With one card used lightly and paid on time, many people see a FICO score in the high 600s to low 700s after 6–12 months. See your first US credit card.

Do debit cards or Wise build credit? No. Only credit products that report to the bureaus build credit.

Does being a non-resident lower my score? No. Scores do not consider nationality or residency. Issuers may still decline you under their own policies, such as requiring a US address or income.

#Sources

• https://www.myfico.com/credit-education/whats-in-your-credit-score
• https://www.myfico.com/credit-education/credit-scores
• https://www.annualcreditreport.com/
• https://www.consumer.ftc.gov/articles/what-know-about-credit-freezes-and-fraud-alerts
• https://www.irs.gov/tin/itin/how-to-apply-for-an-itin
• https://www.experian.com/ , https://www.equifax.com/ , https://www.transunion.com/
• https://www.americanexpress.com/en-us/company/about-us/moving-abroad/